Accounting & Investing Info for San Antonio A & M
Tuesday Oct 21 2014
Bull markets are inclusionary, we want everyone to know eveyrthing about us. That is a market made for Facebook. And for Texans wanting more power. This is a story on a Houston, Tx firm which adds twin turbos to already insanely fast Ferraris, no doubt voiding any warranty.
But this is typical top of the market thinking that gave us Cords and Duesenbergs in the 1930s.
Monday Oct 20 2014
For a look at a true cost is no object project check
Ladies how would you like a den with this kind of wood detail in your house?
There is a market for cost is no object toys.
Monday Oct 20 2014
Here is an interesting analysis of three coffees. I aksed Whataburger why they were not in the upscale coffee business at a recent gathering. Oddly the lady cited the high price of coffee makers. Coffee of course carreis a far higher contribution margin than food.
Monday Oct 20 2014
IBM stock price is tanking in pre market trading Monday. The reason is lower earnings and declining prospects, world wide.
This is simply anohter puzzle piece falling into place. This suggests thw five year bull market in stocks is ending.
IBM was THE blue chip stock when I first became a broker in 1973. Every portfolio contained IBM if you had a growth fixation. Louis Gerstner transformed IBM from a computer maker to solutions provider. Apparently the market for solutions is falling.
This is another example of why we study the reporting of per share earnings in ACCT 3312. As nervousness rises, investors react quickly to bad news. IBM is still making lots of money, just not as fast as investors would wish, and so the stock price falls.
Lesson, stock prices can and will fall as they did in 1973-74 evenwhen companies are making good money.
Yahoo;s Mayer goes to Plan B. The new female CEO for Yahoo is now looking to invest money frrom the sale of assets. The idea is to latch onto a growth vehicle. Hmm, how many times did Dell and MSFT try this and fail? With the stock market prospects down, this looks even more challenging.
Weekend Oct 19 2014
Of Two Minds suggests there is a third type of capital. And that it will be increasingly important in future years.
In the past we have had cheap labor and monetary capital. Now Smith suggests that innovation, robotics, and creating value will be the new capital. Thegarage door opener is a good example. Low research and development costs coupled with low interest rates to finance it in an environment of high regulation and taxes is a job killer to be sure. And that is where we are with this administration.
We he the highest corporate tax rate in the world. No wonder companies are fleeing the USA.
Areyou following Smith's suggestion?
Friday October 17 2014
An alert accounting student sends this article about jobs and pay. NOtice that a accounting first appears mid pack salary wise. But it continues to appear all the way to the top, the 99th percentile rank.
So what is the difference? The top two ranks have obtained accounting certifications which put them in an altogether difference income strata.
As I remind students, certifications are a gateway to success.
Thursday Oct 16 2014
The Bike Waiter is featured in a story in the SA Express News today. The young lady in the article has ridden 2700 miles the last few months and I would guess is in great shape. I would recommend more protective gear than shorts and a sleeveless top as I suspect would their workman comp carrier.
At any rate, presumably one has to be within a close enough distance to a restaurant for bike delivery to be reasonable. This business exists in St. Louis and San Antonio. This is an outgrowth of the pizza delivery business of course, Pizza is relatively hardy substance and packs well into flat containers.
I looked at the restaurants available in my zip code and some are actually downtown, I live between Wurzbach and Huebner. Surely one would need a motorized vehicle for that distance. Hmm, time to bring back the three wheeled Cushman, or perhaps a Fiat 500 with th passenger seat removed would be the right urban traffic warrior.
Comments on The Bike Waiter Here.
How does this business make money?
Would you rather be in the delivery business or the restaurant business?
Why from a managerial accounting standpoint?
Wed Oct 15 2015
Marvin Elllison with a good deal of retail experience is the new J C Penny CEO. But as you will read analysts at UBS are not convinced. Macy's and Kohl have the better road map they say.
I don't konw, probably the best thing goinng for JCP is the weak performance of Sears sliding off the screen. And TGT has had its problems. All are up against Amazon with its lower cost structure.
We will continue to track the fortunes of JCP.
Wed Oct 15, 2014
It's only October and already half the class has given up. The rest of the class is divided. The second group hangs back. The first engages Professor Kingsfield. I don't think the first group is really any smarter but theyhave more courage. On Monday I am moving to the first group.
James Hart in The Paper Chase, 1973
verb \ˈlä-lē-ˌgag\
: to spend time doing things that are not useful or serious : to fool around and waste time
Unit Cohesion
Unit cohesion is a military concept, defined by one former United States Chief of staff in the early 1980s as "the bonding together of soldiers in such a way as to sustain their will and commitment to each other, the unit, and mission accomplishment, despite combat or mission stress".[1]
__________________________
It's only October and already only half the class is checking in either on line or in person. About one third of the classes are completing the weekend quiz after the posted deadline.
Quiz Deadlines are posted Sunday Night at 10 PM. Extentions will not be granted unless you show up for class in a very large plaster cast. Plan to start and finish well before Sunday night.
And I am receiving requests
-that I post all the answers to every homework problem
-that I extend time to take exams for all sorts of varied reasons, pick one,
The Paper Chase, quoted above, is a movie about first year Harvard Law students. They are enrolled in Professor Kingsfield's contract law class. He is brutal in his questioning and not the least empathetic as students squirm under his socratic method of questioning.
But in the end, Hart and another student persevere and pass with an A. The movie profiles the various student types as they form a study group. The group finally breaks down as students fail to complete their share of the outline or the lack of 'unit cohesion' splits them apart.
Where am I going with this? One learns by doing, not by simply listening. The learning process can only proceed if first you and then I understand what you do not know. That only happens if students attempt the problems before coming to class. Then ask questions on what you do not understand.
Learning does not take place by simply staring at the answer to a problem. This is overwhelming. This does not stimulate critical thinking or questioning.
Now stop and think. How many questions do I get in class? How many questions are registered by those at home? The answer is few to none. No doubt everyone is of the opinion that they can simply open the book during the timed exams at home and locate teh answer. The too high grades suggest this is the case. But that will be of little help after graduation whe you are facing a real exam on a computer at a test center under highly regulated and monitored conditions.
Not so long ago the CPA exam was the last of the professional exams (law, medicine, architecture) still given on paper. One had to literally write out some of the answers or problems. The same exam was given to the entire nation and only twice a year. And in Texas in only four cities, Dallas, Houston, San Antonio, and Lubbock. And of course one had to qualify and register months in advance.
The result was the formation of cohort study review groups via universiites or private providers like Becker. It afforded one the opportunity to observe others in stressful conditions. Liasons were formed, and as time went on it became clear who was really serious. Then as now the pass rate was lower than it is now, then about 35% on any one part.
I have concluded that one reason so few of our graduates take any certified exams is the lack of unit cohesion. Unit cohesion, remember the Three Musketeers, one for all and all for one, results in if she can do it I can do it attitude. This is precisely why the military so values this concept. But our commuter campus does not lend itself so much to the sort of intense competitive spirit one might encounter at a residential university. To wit, UT Austin and College Station typically score the highest pass rates andd they have the highest admission standards.
Suggested viewing
An Officer and a Gentleman-= the story of how the military basic training can change an otherwise rebellious individual has been told many times but never better than when Louis Gossett Jr. is the Marine Drill Sgt. A different setting but the same basic theme as Paper Chase.
Tuesday Oct 14 2014
It's Tuesday which is the day for Brett Stephens Global View column in the WSJ. For a look at what the nest two years may hold, I highly recommend today's column. His title is
Obama Survival Manual, Intl Edition in which he describes POTUS as
a self-infatuated weakling
Now before you accuse me of being politically negative, after all this is Brett's column, I return to my 1973-74 analogy. Markets love alternation and that is what we have.
In 1973-74 we had Republican Nixon in the White House, despised by the Press. After losing the race for President in 1960 and then Governor of California in 1962, Nixon angrily told the hostile press, at least you won't have Nixon to kick around any more. And then Phoenix like,he returned, the worst nightmare for the liberal press.
Now we have alternation. A Democrat is in the White House with as Bernie Goldberg puts it, A Slobbering Love Affair with the media. This time the internet has given rise to the cirticism of the President.
But the point as Stephens says, is that q world of rambunctious rogues have two years to be assured the US will do nothing to stop them.
From that standpoint the mid East becomes Viet Nam with refugees clinging to helicoptors fleeing the US Embassay rooftop. Come to think of it, we have already had an ambassador and his guards killed in Benghazzi.
Yesterday we speculated on the possibility of a crash. Yet crashses alwyas come at the end of a move, just as parabolic upmoves, like TSLA come at the end of a bull market.
But a crash does not have to occur. Like our frog in slowly hotter water, investors can experience a slow or fast boil. The 1973-74 meltdown never saw a genuine crash. The moves down were interrupted with occasional bursts back to the upside. The same thing occurred in the 1930-32 meltdown. It was a stair step decline with investors becoming enthused by the occcasional bounce.
A Diamond Shaped Top in the Russell 2000
RUT exhibits a diamond shaped topping pattern. We have distinct downtrend channels.
On the fourth move down this year suport gave way. Expect this to begin occurring among all the different indexes at different times. Yes the daily stochastic is over done and that led to rallies. But this time the support has given way.
Weekly
There it goes, we have a crossover on the weekly 13-34 EMAs. John Murphy notes this is particularly noteworthy. The 13 and 34 are Fibonacci related numbers. And weekly charts trump daily charts.
Professor Elam 